Seoul to increase credit guarantees to start-ups
(6 November 2015 – South Korea) The South Korean government will increase its credit guarantee assistance program for start-ups and new companies to more than 3 trillion won (A$3.7 billion) until 2019, the Financial Services Commission announced earlier this week.
To help drive the initiative, it will reduce its credit line to established companies that have relied on Korea Credit Guarantee Fund or Korea Technology Finance Corporation for over 10 years.
The move aims to increase credit guarantee for young companies, while withdrawing assistance to less competitive marginal companies in a bid to push them out of the market and to attract and encourage start-ups. As a result, the portion of credit guarantee for business start-ups will rise to 26.7 percent from 20.8 percent.
Around 3,700 companies have received credit guarantee assistance to the value of 2.4 trillion won from Korea Credit Guarantee Fund for more than 10 years with credit guarantee twice as high as the industry average.
The new policy direction, which was made for the first time after the Fund was established in 1976, reflects the Seoul’s desire to restructure established companies largely operating with government assistance.
Subscribe